Add Federal Student Aid to Potential Cuts

And college experts caution that even more cuts could kick in starting next fall. The Higher Education Act, a major piece of legislation that for decades has helped determine how much college aid—including grants and loans—the federal government provides, is up for reauthorization.

ENLARGE

But no matter what happens to financial aid, it won't keep up with the rate at which tuition is rising, says Mark Kantrowitz, publisher of FinAid.org. Here are three types of financial aid that could see changes in 2013.

Pell grants. The Consolidated Appropriations Act that was signed into law last December, which set most federal agencies' budgets for 2012 (and was later extended to March 2013), scaled back spending for this grant program. Those cuts could be made permanent (or longer-lasting) when the law is reauthorized, says Mr. Kantrowitz.

Federal student loans. In late June, Congress voted to extend the 3.4% fixed rate on the subsidized Stafford loan for one more year, through June 2013. Families shouldn't bet on another extension this summer.

College tax credits. Provisions for the American Opportunity Tax Credit, which allows families to get a tax credit of up to $2,500 a year for up to four years, are scheduled to expire at the end of the year. Unless Congress acts, that will be scaled back to a maximum of $1,900 a year for two years.

Donate a Day

The Internal Revenue Service reactivated this benefit, which it allowed after the Sept. 11 attacks and Hurricane Katrina.

An employee at a participating firm gives up one or more vacation days. The company then donates the forgone pay to a tax-exempt group specifically for the relief of Sandy victims. Employees don't get a deduction on their tax return, but the pay they forfeit is subtracted from their total earnings.

The ruling is in effect until Jan. 1, 2014. See IRS Notice 2012-69s at www.irs.gov.

—Laura Saunders The Wall Street Journal

Still Underwater

Nearly 28% of all homeowners with a mortgage owed more than their properties were worth at the end of the third quarter, down from nearly 31% at the end of the second quarter, according to real-estate company Zillow.

Rising home values are responsible for pulling more borrowers out from being underwater, though foreclosures and short sales will also extinguish negative equity.

Markets that posted the largest quarterly declines in negative equity include Phoenix, Las Vegas, Denver, Sacramento, Calif., and Orlando.

Pricier Bird

Thanksgiving dinner for 10—including turkey, sweet potatoes, stuffing and pumpkin pie—will run roughly $49.48 this year, up about 1% from 2011, says the American Farm Bureau Federation.

That may not seem like a huge increase, but shopping pros say supermarkets are offering fewer breaks on turkeys this year, meaning some people who normally buy the birds on sale may end up spending even more this year.

—Jonnelle Marte MarketWatch.com

—The Aggregator, edited by Cristina Lourosa-Ricardo, features news and commentary from The Wall Street Journal and other Dow Jones publications. Email: cristina.lourosa@wsj.com

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